The Financial Wellbeing Pulse

Taking a slightly difference approach in this episode, we sit down with Chris Budd to delve into the exciting launch of The Financial Wellbeing Pulse, a groundbreaking tool designed to help individuals measure their relationship with money. Chris shares insights into how the tool was developed, its key features, and the impact it can have on improving financial wellbeing. Whether you’re looking to gain better control over your finances or simply curious about innovative financial tools, tune in to discover how The Financial Wellbeing Pulse can make a difference in your life.

Welcomes & Introductions

The big secret about napping!

 

What’s on Today’s Podcast?

The Financial Wellbeing Pulse – a way to measure our relationship with money

 

About Chris

Young Chris Budd, how his Dad’s bankruptcy shaped his relationship with money.

The choices Chris made when creating his own financial planning company Ovation Finance

 

About Financial Wellbeing

Where did Financial Wellbeing come from and what is it?

The link with cancer charity Penny Brohn – the aim was to reduce stress with money and led to writing The Financial Wellbeing Book

What has happened since writing the book in 2015?

What is The Financial Wellbeing Pulse?

Link to Episode 89 – Interview with Liz Zeidler on The Financial Wellbeing Podcast

How were the Pulse questions created?

How to show impact of advice for clients?

What problem does The Financial Wellbeing Pulse solve?

 

Currently for the financial planning community, if you are interested, ask your financial planner to sign up

Next steps for financial planners – head over to website for further information or to sign-up

Ovation will be using the Pulse, if you want to work with them Come and have a chat with Ovation Finance

 

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Episode Transcribe

>> David Lloyd: Well, hello, everybody, and welcome to another one in our series of financial wellbeing podcasts. But instead of myself and Chris Budd and Tom Morris wittering away about, you know, what we’ve been doing, the golf we’ve been playing, the records we’ve been buying, we’re taking a slightly different form this week. Tom isn’t with us, but we do have Chris Budd. And actually, I’m going to interview Chris because Chris has got something to tell us. I’m going to see if I can dig down a little bit deeper into, what it is that he wants to tell us about. So before we get into the interview, Chris, what’s this thing you want to tell us about?

Chris Bud: I nap. I think it’s the last social taboo

>> Chris Budd: Well, David, I have a terrible secret that I need to announce to the nation. I nap.

>> David Lloyd: Excellent. And the next half hour will be Chris Bud napping.

>> Chris Budd: I think it’s the last social taboo. You can’t. You’re not allowed to admit that you nap during the day. But I’ve done it ever since I was a teenager. And it’s great, but interesting.

>> David Lloyd: We on the continent, it’s a, it’s a siesta. It’s. Yeah, it’s rather cool. It’s rather sexy. I’m gonna have a siesta over here. It’s a power nap. Makes me better and fitter and stronger.

>> Chris Budd: anyway, sorry, there’s a way you introduced that maybe sound like I had a guilty secret to announce. So what we’re talking about today, David, is something called the financial wellbeing pulse. It is a way to measure our relationship with money.

>> David Lloyd: Excellent. Well, that sounds absolutely fascinating. But before we get onto that, I think our, regular listeners, who’ve been listening to over 100 episodes of this podcast, now like to know a little bit more about the man that made all this happen. You know, about you, Chris, about what makes you tick, about what your road was to becoming a financial advisor. Before we get onto the details of the pulse.

Chris Budd’s father was a financial advisor and eventually went bankrupt

So, just tell us a little bit about young Chris Budd. Tell us about Chris. What were you like at school? What were your favourite subjects at school?

>> Chris Budd: You know, whenever I read a music biography, and I read a lot of music biographies, I always love the ones that start at adult life. Don’t start with. When I was six, I had my formative. Oh, God, that’s so tedious. so look, my father was a financial advisor, and I guess a lot of what I do was informed by one event in my twenties, actually, where my father went bankrupt. He was a financial advisor, kind of not by choice. He got made redundant from a life insurance company, joined somebody else in their business. They then retired. He then ended up on his own, and he ended up going bankrupt, and he lost his house, he lost everything, and he lost his pride as well. And I was closely involved with it, helping mortgage be paid for a while until it was just irretrievable. And I saw what it did to him. And I kind of, there’s a phrase that I use which is, I decided I wasn’t going to be a victim of life like my father was. And I guess seeing how he earned, quite well for a few years, and he was a bit of a show off, if I’m honest. he came from a very working class background. My grandfather was a road sweeper, and, when dad got a bit of money, he bought a few things to show that he had a bit of money. So when it was taken away, it really affected him because his self worth had been built up as his net worth built up, and he needed external things for his pride. So all of this kind of goes into a melting pot that when I then set up ovation finance, my financial planning firm, which kind of started in 1998, I decided I didn’t want to do that. I didn’t want to be somebody who was just helping rich people get richer. you know, I wanted to think a bit more about what it was all for. And I’m not going to say I did that m from the outset, but over the years, I kind of developed my thinking until eventually, back in 2015, and I wrote the financial well being book. That’s kind of the germ of what I saw my father go through, ended up in this kind of thinking about the relationship between money and happiness.

>> David Lloyd: that’s interesting. And I think our parents generation, they’re roughly of the similar generation, I think that post war, or during the war and post war generation, I think a lot of them had that in common, coming from sometimes quite not very well off backgrounds, going through that period of relative prosperity, through the 1950s and sixties, when all of a sudden people had more opportunities in life who could start to create wealth. But for a lot of people, they didn’t necessarily know what to do with it when they had it. And it was, as you say, it was about, look at me, look what I’ve got. I’ve got this shiny new thing. But that hasn’t necessarily, and, clearly, in your dad’s case, for circumstances presumably largely beyond his control, didn’t necessarily bring them the happiness that they hoped that it would have done.

>> Chris Budd: No, no, exactly. And you can also add to that I was a teenager. I was born in 1967, so I was a teenager. and then we might say young adult, in the eighties, during Thatcherism, during the, Greed is good, Gordon gekko kind of yuppies and all that kind of stuff that came along with it. Loads of money and all that. And I found the whole thing terribly vulgar. It just didn’t, didn’t work for me at all. I remember working with a guy who was a real yuppie, when I worked for sun life, when I was very first jobs in Bristol, it was. And he, he would just was a flash the cash, and he was. He was just not a very nice person, if I’m honest. So the whole association that more money makes you more happy, makes you a better person. It’s just never worked for me. I don’t judge people. You know, if somebody wants to be rich, that’s cool. That’s why that works for them. so there’s no judging in all of this. It just didn’t work for me.

In 1998, you set up your own financial advice advisory company

>> David Lloyd: So 1998, you set up a vacation finance your own financial advice advisory company. Was that just you on your own?

>> Chris Budd: Initially, yeah, it was, It was, in many ways a great mistake. I only did it because, I couldn’t find. I wanted to charge time. And back in the nineties, you charged commission, so you set up an investment bond for 5.3%. You could have done a, unit trust for 3%, but that paid you less commission, so you did the bond instead. You know, this is, this is the world I was, I was, I was working in, and I didn’t like that world. I didn’t like the fact that if I went to a party and somebody said, what do you do for a living? And I said, I’m a financial advisor. They rolled their eyes and kind of went to talk to somebody else. So I thought, there has to be a different way of doing this. And so I started charging time and retainer fees. and I, was literally laughed at. Literally. There was a guy I worked with, and he laughed in my face when I sent out my first invoice. He said, you actually think people are going to pay this? And, yes, I do. I earn a lot less than I could have earned from the commission route. But I had started to build up loyal clients, who I saw every year. This is just, this is the norm now. But back in 1998, I was just on my own. I mean, I actually wasn’t. There were. I didn’t know this, but there were a few others doing similar things in the country. But as far as I was aware, I was on my own so slightly. But surely after a few very, very difficult early years, started to build things up and, yeah, ended up with a lovely bunch of lovely clients and lovely employees, and, back in 2018, sold it to something called an employee ownership trust, and now it continues under the employees governance. and, yeah, I’d like to think it’s a very happy place to work.

>> David Lloyd: Excellent.

You’ve always been a bit of an innovative thinker

So I think it’s probably fair to say then, you’ve always been a bit of an innovative thinker and always not been somebody that’s been happy to go down the same road that everybody else has been going down. You’ve always gone, well, hang on a minute, that might be how they do that, want to do it that way. Is there a different way of doing it?

>> Chris Budd: That is very true. There are certain words that I think only other people should give you. I can think of a few, but maybe we won’t go down that road. But, mentor, for example, I shouldn’t call myself somebody’s mentor. It’s up to them to decide that I’m their mentor. Do you know what I mean? And I think there are other words. Entrepreneur, and I’m going to get grandiose visionary, pioneer. Those are all words that I don’t think one should use. I didn’t set out to change the world. I just thought, there’s a better way of doing this, with financial well being. I just thought, oh, money, happiness. Those two, I wonder how they work together. So I started researching it, which leads.

>> David Lloyd: Us very nicely into what my next question was going to be.

Tell us where the whole notion of financial wellbeing came from

So you’ve got your company, you’ve got through the difficult time of setting it up, you’re established, you’re doing pretty well, you started to employ other people. That’s around about the time that I met you and became one of your clients that I continue to be with ovation to this very day, and tell us where the whole notion of financial wellbeing came from and indeed what it is. What is it?

>> Chris Budd: It’s a really, really important question, David. Financial, well being is an area of study which looks at the relationship between money and happiness. A line I use when I do talks is that I actually invented the phrase financial well being. I just didn’t know that two other people invented it before me. Now, that is actually true, because when I came up with the title for the book that I was writing, I googled it, and there were only two entries on that Google search. Now, where did it come from? It came from a place called the Penney Bronn UK Cancer Centre. My wife is an oncology nurse. You know Susie well, and, the. She did some work at the Penney Bronze centre. And what they do is they help you to live well with cancer, is the expression that they use. and I learned about the relationship between stress and being poorly. This move away from just cancer, but general health. So, we have in our bodies immune cells, and immune cells keep us healthy. They battle the bad cells, like the cancerous cells. So conventional medicine, if you get cancer, will zap the cancerous cells. But what about looking after and supporting the immune cells? We should be doing some of that, too. So that’s the principle of what they do at Pennybrum. and when Susie was telling me this, I thought to myself, and I said, well, hang on, one of the biggest causes of stress is worries about money. I know I’m going to write a book called how financial planning can prevent cancer. And she kind of looked at me and went, I’m not sure that’s a good idea. So I thought about a better title and came up with the title of financial well being. But it was really all about trying to reduce stress and worries about money by having a better relationship with money. And that was a starting point of all of this.

>> David Lloyd: And I have to say, and some people, some listeners might say, well, you would say that, wouldn’t you? But when I read that book, it really did fundamentally change the way in which I looked at money as well, because it sets out in a very clear way what financial well being is and how, rather than just having money for the sake of having money, you can actually start to think about how you can use it to make your life better, to make you feel better, and perhaps make other people feel better in the process as well. So, for me, it was a very important book, and, obviously we’ve gone on to, I do over 100 podcasts about it, will continue to do more, I hope. And indeed, you’ve written a follow up to it as well.

Financial well being has become a big deal in the workplace

so you wrote the first book in 2015. And what’s happened to financial well being since then?

>> Chris Budd: Well, it’s kind of taken off. I mentioned they were kind of taken off. There were two entries on that Google search that I said earlier on, if you google it now, there’s something like 320 million. Now, I can’t claim all of those, right? Well, I can, I probably will at times, but I. The reality is, that it also has become a big deal in the workplace. Now, a little bit in my bodder about this one. In the workplace, when you hear the phrase financial well being, it tends to describe somebody who is teaching about financial education, about debt, and how to manage your money and budgeting. Financial wellbeing, for me, is way broader than that. The second book was called the four cornerstones of financial wellbeing, and it encompasses those four cornerstones, or, what’s true of all of us. And that can be from, theology, from psychology, from neuroscience, behavioural finance. There’s lots of, lots of areas of research about happiness and what’s true of us all. The second cornerstone is what’s true of each of us. So that’s understanding how this applies to you in your life. The third cornerstone is the barriers that are true of all of us. And then the fourth cornerstone are the barriers that’s true of each of us. So there’s so much in that, that’s a really broad topic that’s way more than simply looking at how to manage your money a bit better. And in fact, some of that theory and research, if we apply it, can solve the budgeting problem by itself, through education of how we behave and how we see money can sometimes actually work against our own best interests. So it’s about making better financial decisions, and it’s just, it’s grown and grown and grown. I’ve founded the Institute of Financial Wellbeing, so financial advisors can learn more about this. we’ve got the podcast, there’s the financial wellbeing certificate that people can take, that, actually, advisors can take to learn more about it. So, I kind of see it as a direction to travel for financial advice in the UK over the next decade.

>> David Lloyd: Excellent.

Financial wellbeing pulse helps us understand what financial well being is

Okay, so we have a, ah, better understanding now, or a broad understanding of what financial well being is. Tell us about the pulse and how that will help to aid our understanding or the way in which we can apply financial wellbeing in our lives.

>> Chris Budd: So there’s a great expression which is that you are what you measure or you concentrate, or focus on what you measure. And there’s an organisation called the Centre for thriving places. It used to be called Happy City. Members, of the IFW who listened to this will know Liz Zeidler, who has spoken at conferences. I’ve put on a. And they’ve been measuring happiness for quite a long time. So they have something called the happiness pulse. And you can go and find out how happy you are, which is great, but this is used a lot, for example, by employers, because if you want to, put interventions into your workplace to help people, you need to know what to focus on. But, more importantly, you need to see the impact of your interventions. So you then go and do the happiness pulse a year later and you can see the effect of what you’ve been doing though. The financial wellbeing pulse is a, development of that happiness pulse by adding on a financial wellbeing set of questions. The way it works is a financial advisor has got a client coming to see them, they send them a link, the client goes through the pulse and they get a score. Your financial wellbeing is 40%. They also get a short report which explains what that means. The advisor gets a copy of that report so the client can discuss it with the adviser in the meeting. A year later, for whatever period it might be, the client goes back for their annual planning meeting or annual review meeting, they do it again and they get a new score. Your financial wellbeing is 50%. So now the adviser can say that your financial wellbeing is increased by ten basis points as a result of our relationship.

>> David Lloyd: And are they the same questions that you ask each year? yes. And how did you come up with them?

>> Chris Budd: Ah, that is, the real strength of the pulse. There’s a chap who works with centre for thriving places called Professor Sam Wren Lewis, who’s a professor of psychology and has written amazing books on happiness. There’s also a chap called, Doctor Thomas Mather, who works in the heads behavioural unit of Agon and myself. And the three of us got together over quite a period of time and worked at all of the theories and research on happiness and came up with this question set. So the academic rigour behind the questions is a real important strength. also, what’s an important strength of it is that the questions are very intuitive. So the whole pulse takes about ten minutes to complete. They could be, I’ve done it in five. but you can do it in ten if you take a bit of thought over it. So it’s not onerous and it’s very intuitive, and that’s one of the real strengths of it. One of my favourite quotes about writing is Blaise Pascal, the french philosopher, who said, I’m sorry I wrote you such a long letter, I didn’t have time to write a shorter one. And so it’s taken us a lot of time to get to this question. Set, which is very intuitive, very simple. The other part to it. Sorry, just one other little bit, David. For me, the other bit is what the firm gets, because the firm gets a dashboard of all of the data from all of the client questionnaires so they can see across all of their advisors, all of their clients, how things are going. They can give a, total firm score so you can put on your website, we increase the financial wellbeing of our clients on average by 12%, which is a hell of a thing to say in your marketing.

>> David Lloyd: clearly, that’s a very important aspect for both client and for the firm as well.

The financial wellbeing pulse will give you an average across all your clients

In what other ways do you think financial well being or measuring financial well being in this way is important?

>> Chris Budd: Well, it’s going to be massively important for one very, very key requirement of firms now under what’s called consumer duty. It’s a new, compliance regime that firms have to go under. And one of the requirements of consumer duty is you need demonstrate the impact of your advice. And this has got a lot of firms, scratching their heads. How can we demonstrate that we’re doing a good job? Well, now you get a number. The financial wellbeing pulse will give you an average across all your clients, and you can give that to the FCA and show how the impact of your advice on your clients. It’s a very simple, easy tick for the consumer duty requirement. And that is going to be, I think, the biggest reason it will get taken up by firms. actually, it will also skew the discussions away from money and et cetera into wellbeing, which can’t be a bad thing, I don’t think, as well. But the consumer duty tick is going to be a big driver, I think.

>> David Lloyd: Yeah, I can see that. So you’re essentially, you’re providing a benchmark figure for something that it’s not been possible to benchmark before. And you’re giving people a way of comparing performance as well. because I guess that is important within your industry.

>> Chris Budd: Totally. Yeah. But the performance that’s usually measured is investment performance rather than the performance of the advisors with the client. because it hasn’t been a way of measuring that. Exactly as you say. Yes.

>> David Lloyd: Excellent.

Financial wellbeing tool aims to help financial advisors uncover true client objectives

And so, I mean, you’ve touched on some of that. but fundamentally, what’s the problem you think that is being solved by this?

>> Chris Budd: When clients go to see financial advisers, generally speaking, what they’re asking for, the question that they ask is not actually what they’re asking, what they need. Let me give you an example. Say somebody who’s 53, goes to see a financial advisor and says, I’d like a pension review. I’ve got ten different pots. Can you do a pension review, please? And, the financial advisor will say, great, that’s my area of expertise. Scoop them all together, put them into self invested pension, create an investment portfolio. Good job not criticising that in the slightest. What the client actually wanted, however, is that they’re doing a job which they don’t enjoy, they’re quite depressed, they’ve got a boss that bullies them, they can’t see any way that they can retire before 65 because they don’t really understand how pensions work. and they would love somebody to just give them a way out, to maybe doing a different job that they could get paid less for, but gives them more purpose in life. The financial advisers never asked any of that. They’ve never got into any of those things. They’ve just done the pension review and created an investment portfolio within a sip. So this is a way of uncovering true client objectives. If you look at the suitability letter that all clients have to get every time there’s a product recommendation, that, ah, suitability letter has got to start off with, what are your objectives? And they almost always say something like, your objective is to access our investment proposition. Your objective is to, beat inflation with your investments. And they’re all the same, and they’re not actually objectives at all, they’re actually outcomes. So this is a way of helping a client to really understand, therefore the advisor to really understand what their objectives actually are. because if you go to see a financial advisor, you think you’re going to talk about money. And so there’s a big barrier in the way of this conversation. This is a way of opening up the conversation and getting much deeper into client objectives.

>> David Lloyd: Wow, fascinating. I mean, this sounds like something, certainly I’ve never heard of anything like this before. Is there anything else out there like the pulse? Any other similar tools you’ve talked about? The happiness pulse, but I mean, is there anything else that’s measuring financial well being in the way that you’re proposing to do it?

>> Chris Budd: Not that I know of. There’s a number of other tools which will measure, your financial, say, capability. They will look at how good you are at budgeting and like I said before, and maybe if you’ve got appropriate life assurance, that kind of stuff, and they’re very useful. but this is different, this is not doing that. This is a different kind of tool because it’s about your relationship to money. there are three different sets of questions within the financial wellbeing tool. One of the sets looks at how good you are with money, so your financial capability, but not asking you what life insurance you have, but just whether you feel in control of your finances. For example, the second set looks at your values. Do you see money as an objective which we know from research will make you less happy and other similar sorts of financial values. And the third one looks at your financial situation, whether you feel, for example, that you are able to help people that you want to help. so it looks at areas that normal financial planning tools don’t look at. So it will work with any of those. As an adjunct, it’s a different thing.

>> David Lloyd: And is this something that an ordinary member of the public could access or is it exclusively for financial advisors at the moment?

>> Chris Budd: it’s just been launched and it is exclusively through the financial advice community. so anybody who wants this go in, ideally go and say to your financial advisor please could you sign up to the financial wellbeing poll so I can access it, in time. we’ve got a lot of workplace providers, who are very very interested in it. so there’s a few people who do well being in the workplace or they service workplace pensions, that kind of stuff. They’re very very interested. So that will be coming, I don’t know when but that will be the next iteration. and then ah, general public. yeah, maybe in time. But really if the idea is to help financial advisers help their clients better, that’s really the objective at the outset at least.

>> David Lloyd: So if you’re a financial adviser sitting at home listening to this going this sounds a fantastic idea, what do you do next? Where do you go, how do you source it? And more importantly, what’s it going to cost?

>> Chris Budd: So you go to a website which will be in the show notes, but it’s financialwellbeingpulse.com. it costs depending on the type of firm, its starting price is really, really low. It’s 25 pounds a month for a bunch of licences, enough for you to be, sorry, a bunch of uses, enough to be able to use in a year, probably about 70 uses. And then it’s deliberately priced as low as we can get it. Because I want impact. I’m not financially driven, I want impact. I want this affecting the pushing the direction of travel of the financial advice community. Anybody who’s in a larger form or a multi advisor firm there’s obviously discounts them for multiple licences and anybody who’s in a really big firm, give me m a call. but if they go to that website, all the information you have is on there, the signup ability is on there. yeah, you can, you can get using it within hopefully about ten minutes.

>> David Lloyd: Well, as a client of evasion finance, who I’m sure have signed up for it, I look forward very much to sitting down with Tom Morris, who’s my financial adviser, and him going through this, financial wellbeing pulse with me. It genuinely sounds absolutely fascinating, Chris, and I think you might just appear hit on something here.

>> Chris Budd: Bless you, David. Thank you. I can’t stress enough, it is as simple to use as possible. And I would also say for those people who just want the consumer duty, tick and who don’t actually want to sit in front of their clients and discuss this, yeah, you can still use it. The client will get the report, and they can find that interesting, and you’ll get all the data to tell the FCA. But anybody who does want to have that conversation with their clients, they’ll get a copy of the report and they can discuss it. So it’s as simple or as complicated as you want it to be.

>> David Lloyd: Excellent, Chris, that’s been a really interesting chat. Thanks for sharing that with us. I hope you at home have found that you might not be at home, you might be at work, but wherever you are, I hope you found that interesting and I hope you’ll join us again, at some indeterminate point in the future for another one in our series of financial well being podcasts.

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